Fed Raises Interest Rates Again As New Chairman Steps Into Spotlight : The Two-WayThe central bank raised its key interest rate for the first time under Jerome Powell, announcing a quarter-percentage-point hike. Economists wonder if faster growth will mean more aggressive hikes.

The Federal Reserve raised its key interest rate today. This came in Jerome Powell's first meeting as the Fed chair. The vote was unanimous for a quarter-point increase in the federal funds rate. That's the benchmark that many business and consumer rates are based on. As NPR's John Ydstie reports, the Fed also signaled interest rates could rise faster.

JOHN YDSTIE, BYLINE: In his first news conference since taking the reins as Fed chief from Janet Yellen, Powell gave an upbeat assessment of the U.S. economy.

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JEROME POWELL: The economic outlook has strengthened in recent months. Fiscal policy has become more stimulative. Ongoing job gains are boosting incomes and confidence. Foreign growth is on a firm trajectory, and overall financial conditions remain accommodative.

YDSTIE: And the members of the Fed's policymaking committee boosted their forecasts for growth in 2018, raising it to 2.7 percent - up from their December estimate. They also predicted slightly lower unemployment by the end of this year. But that forecast of stronger economic growth also includes an increase in the pace of interest rate hikes.

While the Fed continues to signal a total of three rate hikes for this year, it added rate increases in 2019 and 2020. Powell said the committee continues to try to balance the risks of raising rates. If it raises rates too quickly now, he said, the Fed could stifle growth. But if it waits too long to boost rates, inflation could accelerate, and the Fed might be forced to raise rates even higher and faster. And that could push the economy into recession.

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POWELL: We're trying to take that middle ground, and the committee continues to believe that the middle ground consists of further gradual increases in the federal funds rate as long as the economy is broadly on this path.

YDSTIE: For now, Powell said, he does not see any sign inflation is accelerating. When asked about slow wage growth, Powell said he's surprised wages haven't risen faster even though businesses report it's become harder to find workers. But Powell was less of a cheerleader for wage growth than his predecessor, Janet Yellen.

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POWELL: In terms of what's the right level, I don't think I have a view on what the right level of wages is, but I think we will - we will know that the labor market is getting tight when we do see a more meaningful upward move in wages.

MARK VITNER: He looks very much in control at the Fed. I think that he's made a very strong case that interest rates are going to need to rise faster. He may need to beat that drum a little bit harder to get that message through.

YDSTIE: Today's quarter-point rate hike was the sixth since the Fed began raising rates a little over two years ago. Before that, the benchmark rate was kept near zero to boost the economy after the Great Recession. John Ydstie, NPR News, Washington.

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